2016-01-11

Even if Home Prices Rise 50%, Developers Still Lose

How do developers lose if home prices rise by 50%? Their land costs rise faster. Some land prices accelerated higher due to the presence of land speculators.

Huangqi Sen said that THAIHOT did a calculation, two years ago it spent 35 billion to acquire the land, if purchased this year it would cost 70 billion. Previously some unprofessional developers, take a piece of land, put a few years, relying on land value is higher than the manufacturing sector also earn profits, but the moment this trend shows that the future is great pressure to do so.

Sun Hongbin also believes that the current Chinese economy has gradually downside is the consensus of the world. But the land is scary expensive. "I always say, we must not get yourself in a pit. Can not buy a piece of land that is very expensive, it will take years to slowly come back."

...Sun Hongbin said the count Hefei, financial record into the eight second-tier Chinese cities in 2015. This is mainly because of Beijing, Shanghai, the premium can not afterwards. "Math would lose money, housing prices rose 50 percent still lose money."

"2016, if land prices in Beijing and Shanghai drop in price, we will continue to buy in Beijing and Shanghai. If land prices continue to rise, we will quickly exit the business." Sun Hongbin said, "control risk" is the key phrase in 2016.